By Rogerio Jelymayer And Paul Kiernan
SÃO PAULO--Brazil's Federal Police said they arrested the chief
executives of construction giants Odebrecht SA and Andrade
Gutierrez on Friday morning, in the latest phase of the continuing
investigation into what prosecutors and the police allege was a
corruption scheme involving contracts signed by state run oil
company Petróleo Brasileiro SA, or Petrobras.
The arrests mark the first time executives from Odebrecht, one
of Latin America's biggest construction firms, and Andrade
Gutierrez have been arrested. Both companies previously had been
named in the investigation, but no executives had been
arrested.
Marcelo Odebrecht and Otavio Azevedo, the chief executives of
Odebrecht and Andrade Gutierrez, respectively, were among those
arrested Friday, according to a police spokesman. The executives
are accused of participating in the formation of cartels, money
laundering and corruption, the police spokesman said.
"We have no doubt that Odebrecht and Andrade Gutierrez headed
the cartel scheme within Petrobras," said Brazilian federal
prosecutor Carlos Fernando dos Santos Lima. "I do not see how the
companies can claim innocence given how much evidence we have."
Mr. Lima said executives from the two companies had not been
arrested earlier because, he alleged, they "had a more
sophisticated system" for making the alleged bribe payments, using
foreign bank accounts in Switzerland, Monaco and Panama.
The lawyer for Odebrecht declined to comment for this article,
and a spokeswoman for Andrade Gutierrez declined to provide the
name of the company's lawyer. The company said in a short note that
it is cooperating with the investigation, and denied any
wrongdoing. Attempts to contact the executives or their lawyers
weren't immediately successful Friday.
In a statement, Odebrecht said that its offices in São Paulo and
Rio de Janeiro were searched by police, but it didn't confirm the
arrests. The company said that the police operation was
unnecessary, since the company is cooperating with the authorities'
investigation. Odebrecht officials have previously denied any
involvement in the alleged scheme.
The arrests are part of the continuing investigation into what
prosecutors have dubbed Operation Car Wash, in which Petrobras,
along with Brazil's biggest construction firms and about 50 current
and former politicians are alleged to have participated in a
yearslong bribery scheme. Investigators accuse Petrobras officials
of taking a cut of cash from inflated contracts and funneling the
rest to lawmakers and political parties. Some of the accused have
admitted wrongdoing in exchange for lesser punishment, according to
prosecutors, while others have denied involvement and await
trial.
Prosecutors said in May that the total estimated amount alleged
to have been paid in bribes was $2 billion. In April, Petrobras
wrote off $2.1 billion due to alleged corruption and more than $14
billion for overvalued assets.
Write to Paul Kiernan at paul.kiernan@wsj.com
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